2020 was an eye-opening year for every industry and the pharma industry is not an exception. From supply chain disruption due to over-dependence on China to fractured fieldwork and numerous allied unfavourable changes, we faced several challenges and are still facing them.
But, all these changes have taught us many things and now we are evolving. Overreliance was always dangerous and the COVID situation played its cards so hard that now we can’t afford to oversee any problem and we are getting equipped to fight possible future uncertainties.
It is said that challenges never come without opportunities. The same is applied to our pharma industry which is now evolving through the impact of the COVID-19 pandemic to chase new opportunities.
Also, we have an educated population of patients whose mindset has evolved to a better and greater extent during this period. They have become health conscious because of the pandemic. Even the vaccines will increase the pharma market. So, a new segment is going to emerge i.e., immunisation.
FY 2021 is likely to be a game-changing year for the healthcare industry. Due to the pandemic experience, the population is focusing on health, fitness and building immunity. Strengthening health and wellness as well as fitness of the body is going to be a major focus all over the world.
As a result, the pharma industry will no longer be able to focus only on illness while providing medication but will have to keep a balance of how quickly a patient’s health is restored. To do that, besides hospitals, building rehabilitation centres, health clinics and gymnasiums along with yoga will be seeing the light of day.
In a nutshell, we are moving towards personalised focus in healthcare. That’s one reason we can say that it’s a game-changing year after the pandemic.
10 major trends
Below mentioned ten trends will change the game and decide the future of the pharma industry. Let us look at the implications of these ten trends for the year 2021-22, consolidate our thoughts and prioritise them to provide a kind of direction for growth.
1. Vitamin & Minerals supplements (VMS)
With increasing incidence of lifestyle diseases and patients getting inclined towards preventive and curative nutrition, one of the substantially growing segments in FY 2020-21 is ‘Vitamins and Minerals supplements’. With an increasing number of doctors prescribing vitamin and mineral supplements in the patients’ treatment regimen, pan-India primary research of Interlink shows that 63 per cent of nutraceuticals products are catered through pharmacists based on generated prescriptions.
This will progress further as medical foods and foods for special diseases open the doors wide open for this sector. By 2022, the nutraceutical market in India will be worth $8.5 billion and accounting for three per cent of the global market share.
Factors contributing to this growth of nutraceuticals are as follows:
a) Busy lifestyle: Easy to carry nutraceutical supplements and products come in handy to fulfil one’s nutritional needs in a hectic lifestyle where having a balanced meal may not always be possible
b) Rising patient awareness and body image concerns: Patients are aware of the side-effects of medicines due to the presence of chemical entities. By contrast, nutraceuticals provide natural, plant-based alternatives. Millennials, being weight conscious, are turning to nutraceuticals to lose weight
c) Focus on preventive healthcare: About 62 per cent of the healthcare costs incurred in India are borne by the patients out of their own pockets. Preventive care has received impetus lately due to the rising costs of healthcare
d) Internet penetration: This helped increase the availability and visibility of nutritional supplements in the market.
Hence, keeping the above factors in mind, VMS is a lucrative market to tap in 2021-22.
2. Specialty care and patient focus
This is a promising area emerging with multiple patient-centric formulations which will add value to build robust patient engagements.
Following are the factors influencing the growth of this sector:
a) Rise in cell and gene therapies: The global gene therapy market was valued at $3.61 billion in 2019 and is projected to reach $35.67 billion by 2027.
In 2019, the oncology segment accounted for a share of over 40 per cent in the global cell and gene therapy market and more than 60 per cent of the current gene therapy clinical trials are targeting cancer. With the approval of several such therapies, there is a shift towards effective patient-specific treatments. This will further positively propel the cell and gene therapy market in 2021-22.
b) Consumer healthcare market is on the rise: Prescription drugs are turning into self-medicated ones. Companies are relying on consumer insights to enhance their channel management and merchandising capabilities as well as to lower their margins.
Looking at this scenario, we can say that the growing market of patient-specific medicines will make some impressive moves in 2021-22.
3. Heritage brands
Heritage brands are the cash counts of many companies and a majority of the volume is generated by these cash counts who directly fund R&D work and new product development. Besides, it has been observed for many years that they grow at a lesser pace but contribute to market share and ranking of the brands. They are also responsible for the growth of the company.
Many heritage brands have seen the process of evolution by either re-composing their ingredients or by adding certain relevant ingredients or by creating additional brands for better treatment of existing as well as new customers. The issue of losing earlier target customers get properly addressed when companies create new usages, new indications for the existing or new customers.
Repurposing the heritage molecule is another aspect of extending the lifecycle of the heritage molecule so that new indications and new customer groups are formed.
As seen in 2020, biosimilars will continue to take a share of the market and substitute generic products demand in 2021.
Indian pharma companies such as Biocon, Glenmark Pharmaceuticals, and Zydus Wellness are leading the race. Biocon earned Rs 1,517 crore or nearly 28 per cent revenue from biosimilars in FY19. However, factors such as access to critical technology, regulatory guidelines and the price difference between biosimilars and the underlying biologics are key to their adoption.
The price gap between the two has significantly widened to over 60 per cent for some drugs in Europe from just over 20 per cent a few years ago. A larger price difference will help in greater and faster adoption of biosimilars.
Increased investment by key market players, rising burden of chronic diseases, the patent cliff of leading biologic drugs, surging demand and acceptability for innovative therapies and rise in niche therapies are some of the factors that will continue to boost the growth of biosimilars in 2021-22.
E-commerce will create new footprints in servicing the patients and create a new stream of revenue in 2021.
E-pharmacy in particular received a great impetus in the current pandemic which ensured that patients received their medication even in the lockdown. North America and Europe are currently leading the e-pharmacy market. The major e-pharmacy players in India are Medlife, Netmeds, 1mg, Pharmeasy, Myra, Careongo and Pharmasafe.
The following factors will ensure sustained growth for this industry in India:
a) Rapid internet penetration: There are 509.8 million internet users and 600 million smartphone users in India. The top 9 Indian cities will account for 35 per cent of all urban Internet users. Internet users will further increase due to GOI’s ‘Digital India’ initiative.
b) Initiatives by the Government: A national health portal providing information in different languages to create awareness about health programs and services.
Online registration system covering major functional areas like patient care, laboratory services, workflow-based documentation information exchange, medical records management.
e-hospital@nic providing services for citizens for taking online registrations and appointments, payments of fees, diagnostic reports viewing online, online blood availability etc.
Sugam portal for online submission of applications, tracking, approval processing for drugs, clinical trials, medical devices, vaccines.
c) Increase in health insurance facilities
d) Increased spending on medicines: 9-12 per cent CAGR from 2018 to 2022 is expected. However, low industry margins, increased competition, rising pressure on the price, possible drug abuse resulting from sales without prescription, lack of documentation and tracking and poor inventory management are some of the major challenges faced by retail pharmacies which will further increase the adaptivity toward E-commerce and will further propel the growth of this sector in 2021.
6. Initiatives in inventing, manufacturing and distributing vaccines
AstraZeneca-Oxford University collaboration in vaccine production, Serum Institute of India, Bharat Biotech India are expected to strike gold in 2021-22 owing to the increasing demand for vaccines.
The constant rise in AI adoption is fuelling also inventions and surging high-end manufacturing which will further boost distribution channels all around the world due to higher availability and persistent production.
The vaccine business is expected to flourish like never seen before and the industry is getting well equipped to make some excellent moves in this field in the upcoming years.
7. AYUSH awareness
Awareness of Ayush and integrated medicines will increase among the Indian population due to the Indian Government’s support for Ayurvedic and Homeopathic therapies.
India’s Ayurveda product exports, which are currently at $3 billion, are expected to grow in 2021-22 high due to evolving mindsets of the population toward herbal nutritional remedies. In the 2019 Union Budget, the Government increased the allocation to the Ministry of AYUSH by 15 per cent to Rs 1,939.76 crore up from Rs 1,692.77 crore from the previous fiscal. The Government has a target of setting up 12,500 AYUSH centres in India which can boost the growth of this sector.
Ayurvedic ingredients-based formulations ranging from shampoos, toothpastes, packaged juices, nutritional supplements, cough syrups etc are being used by a huge amount population for the past few years and it will continue to be an emerging field in 2021-22.
8. API manufacturing
Due to the severe shortage caused by supply chain disruption due to the COVID situation, API manufacturers in 2021 will reshape their supply chain strategies by adopting multiple suppliers and increasing reliance on regional manufacturers.
New regulations can be seen in the domestic supply of essential APIs to ensure the ‘’country of origin’’. Also, there will be a good inclination among manufacturers toward achieving global quality standards for medicines.
Such initiatives by API manufacturers will strengthen the availability of raw materials and APIs in the upcoming years.
9. CROs and AI
Investments in CROs are increasing and paving way for new products. The penetration of CROs in the pharma industry would increase in 2021. With increasing mergers and acquisitions, CROs will grow significantly this year. As pharma companies are increasingly adopting globalisation, CROs are also expected to go global to expand their reach.
With increasing adaptiveness toward remote working and digitalisation, leaderships and managements of industries are expected to invest huge capital in artificial intelligence (AI) and technology in 2021.
The usefulness of AI in identifying candidates for vaccines and trials, conducting virtual trials, R&D, supply chain and manufacturing are the major factors that will boost the willingness of industries to invest in AI.
AI and digitisation will fill up the pipelines in 2021 by enhancing the quality of existing drugs, creating new drugs and promoting the best services in the pharma industry.
10. Pharma exports
Pharma exports will increase due to increasing demand abroad. With supply chain disruption from China, many nations are moving toward possible available options to achieve APIs which will lead to a rise in exports.
Indian pharma industry exports will touch $25 billion in the current financial year, up from $20.5 billion in 2019-20. Major exports are affordable generic medicines, and this year in particular, as mentioned in the sixth trend, the world is looking at India for COVID-19 vaccines.
These ten growth drivers will change the fulcrum of the pharma industry and move it towards wellness from illness, and boost it from the availability as well as profitability point of view.
Looking at the potential and influence of these growth drivers, it will be possible to achieve 12-14 per cent growth in FY 2021-22. Also, a few Indian pharma companies will work backwards towards prevention but take the industry forward in terms of growth.